Supreme Court will consider workers’ rights to sue over pension plans
The U.S. Supreme Court agreed to consider giving workers who participate in pension plans more ability to sue when they believe the money is being mismanaged.
The justices will hear arguments in their next term from retired U.S. Bancorp employees who say their plan lost more than $1 billion during the 2008 market crash because the company invested all the plan’s assets in high-risk equities.
The case affects workers in defined-benefit plans, in which retirees are entitled to a specific level of income and don’t have individual accounts.
A federal appeals court said two retired workers couldn’t sue because the U.S. Bancorp plan had become overfunded, meaning the employees weren’t at any imminent risk of financial loss. That was at least in part because the company injected more than $300 million into the plan after the suit was filed in 2013.
The retired workers, James J. Thole and Sherry Smith, say a federal employee-benefits law allows suits as a way to police misconduct among plan managers, even when plans are overfunded. The Trump administration joined the retirees in asking the court to take up the case, calling the issue “an important question that arises with some frequency.”
U.S. Bancorp urged the court to reject the appeal, saying Congress didn’t intend for plans to face costly litigation when participants haven’t been injured. The company said Thole and Smith have received their full benefits every month since their retirements.
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